CEOs is HR Your Most Valuable Alliance Partner?

CEOs is HR Your Most Valuable Alliance Partner?

For many years leaders have been saying that people are their most important asset. Over the same years, we’ve seen people struggle to find the right opportunity to grow and be more successful.  What would happen if, as senior leaders, we created a new employment agreement that takes both parties best interests into consideration?  How can human resources (HR) become your key alliance partner?

In several industries, the unemployment numbers are hovering at record lows. These successful businesses are struggling to find people to fit their jobs. Soon, we will see lack of talent as a major constraint on an organization’s continuing growth. The impending baby boomer retirement wave can only make this more challenging. So what can we do to solve these challenges? I suggest making HR your key alliance partner.

This is one of the challenges keeping my CEO clients up at night. My clients tell me that they see human capital as a critical resource for their business. As many of their organizations have matured, their talent management systems have struggled to keep pace. In several cases, I’ve been told that this is an HR issue and I should take it up with them.  My answer is almost always the same; HR people are not fired for missing their growth goals.  If you don’t have the right people in HR, it’s a CEO level challenge.  This being said, let me share several ideas on how to engage and empower your HR people in this challenge.

There are three key aspects to setting up a stronger more agile HR organization. If you start your discussions with HR, you are more likely to achieve the success you want building a world class organization.  I’ve never seen a successful organization grow where HR is dysfunctional.

First, make sure the people who lead HR understand the critical nature of their roles in finding and developing good people. We must help them create metrics that map with the metrics of other strategic parts of your organization. For most organizations, people are the largest or second largest cost to your business.  Individuals who manage this need both strong strategy and financial skills.

One of the strategies I’ve seen work is assigning financial compensation that ties directly to the impact they have on the organizations growth and bottom line.  Initially, you may need help on this, but if history is any guide, you can find expertise that can help align your compensation program to corporate success.

Second, HR must become a real partner to you and your leadership team. Have you ever noticed how few HR people are running organizations today? With people playing such a critical role in your organization’s success, I would have assumed that more HR executive move up to CEOs or COOs. To make this work you may want to consider how you develop people in HR.  It’s not enough to be good at the HR part of what they do; you must help them better understand what required to be a senior leader within the organization.  I have found when HR spends more time in the field, they ultimately become better leaders.

Third, have your HR professionals become more involved in value creating responsibilities and less in compliance and legal issues. With all the changes in health care law, we have seen the rise of HR specialist who can provide invaluable, real-time advice to the more transactional parts of HR. It might be a good investment to work with them and leave the strategic parts of HR to your team members. The multigenerational workforce may also require people from different age groups to help you create your development and retention strategies. HR needs to provide you a strategic edge in employee recruitment, development, and retention.  Many HR professionals I know have tried, but have had little impact on how the business managers recruit, develop, and retain key talent.  In the talent age, this must change. In many industries, organizations are spending as much on their recruiting advertising as they are to sell their products and services.

To more fully engage your HR g team, we must create a different way of engaging our employees.  Next week, I share several key lessons from the book, The Alliance by Reid Hoffman, Ben Casnocha, and Chris Yeh from Harvard Business Review Press.  These lessons will help you shape your discussion moving forward with HR. See you next week.